Medtronic 2010 Annual Report Download - page 31

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Medtronic, Inc.
• The integration of Invatec S.p.A. (Invatec) and its affiliated
Companies into our CardioVascular operating segment. We
acquired Invatec and its affiliated Companies in the fourth
quarter of fiscal year 2010. Invatec is a developer of innovative
medical technologies for interventional treatment of
cardiovascular disease. Invatec’s two affiliated companies are
Fogazzi, which provides polymer technology to Invatec and
Krauth Cardiovascular, which distributes Invatec products in
Germany. This acquisition should increase our competitive
position in the peripheral vascular market.
• Continued integration of Ventor Technologies Ltd. (Ventor)
and CoreValve, Inc. (CoreValve) into our CardioVascular
operating segment. We acquired Ventor and CoreValve in the
fourth quarter of fiscal year 2009. Both Ventor and CoreValve
are medical technology companies that develop transcatheter
heart valve technologies for replacement of the aortic valve.
CoreValve’s Percutaneous Revalving System has received CE
Mark approval and is currently available outside the U.S.,
while Ventor is in development stage and does not yet have
a product commercially available. We expect these acquisitions
will allow us to pursue opportunities that have natural
synergies with our existing CardioVascular operating segment
and leverage our global footprint.
• Our ability to consistently grow with the drug-eluting
stent market that is characterized by pricing pressures and
significant competition. Our growth in this market has been and
will continue to be contingent upon continued market growth
and our ability to increase or maintain market share upon the
entrance of competitors’ products into the marketplace.
Neu romo d ulatio n Neuromodulation products consist of
implantable neurostimulation therapies and drug delivery devices
for the treatment of chronic pain, movement disorders, obsessive-
compulsive disorder (OCD), overactive bladder and urinary retention,
gastroparesis and benign prostatic hyperplasia. Neuromodulation
net sales for fiscal year 2010 were $1.560 billion, an increase of
9 percent when compared to the prior fiscal year. Foreign currency
translation had a favorable impact on net sales of approximately
$7 million when compared to the prior fiscal year. Net sales were
driven by increased worldwide sales of InterStim and Medtronic
Deep Brain Stimulation (DBS) Therapies, with ongoing momentum
from Activa PC and Activa RC neurostimulator sales in Europe and
the fiscal year 2010 launch in the U.S.
Neuromodulation net sales for fiscal year 2009 were $1.434
billion, an increase of 9 percent from the prior fiscal year. Foreign
currency translation had an unfavorable impact on net sales of
approximately $10 million when compared to the prior fiscal year.
Net sales were driven by increased worldwide sales of the
RestoreULTRA neurostimulation system for pain management and
sales in the U.S. of our Specify 5-6-5 surgical lead for spinal cord
stimulation. RestoreULTRA, which was launched in fiscal year
2008, is our next generation rechargeable neurostimulator with
advanced programming capabilities and is the thinnest
16-electrode neurostimulator on the market. In addition, revenue
growth increased by worldwide sales of DBS and InterStim
Therapies, but was negatively impacted by the launch of a
competitive product in the pain stimulation market and a short-
term supply shortfall with our implantable pumps during the
fiscal year.
Looking ahead, we expect our Neuromodulation operating
segment should be impacted by the following:
• Market leadership as a result of having a comprehensive
portfolio of primary cell and rechargeable neurostimulation
systems, including surgical and percutaneous leads used in
spinal cord stimulation. The RestoreULTRA neurostimulation
system offers an innovative patient programmer that allows
patients to customize their pain control.
• Our ability to consistently grow with the pain stimulation
market, which is characterized by significant competition. We
remain focused on a number of key initiatives in the areas of
sales and marketing growth execution as well as therapy
adoption growth, which we expect will sustain our market
leadership.
• Continued and future acceptance of our current indications
for Medtronic DBS Therapy for the treatment of the most
common movement disorders, OCD, as well as a planned
indication for epilepsy, which is now under review by the
FDA. The DBS Therapy portfolio includes Activa PC, our
smallest and most advanced primary cell battery, and Activa
RC, the only rechargeable DBS device. We continue to educate
neurologists and the patient population on the treatment
options that Medtronic DBS Therapy offers them.
• Continued acceptance of InterStim Therapy for the treatment
of the symptoms of overactive bladder and urinary retention.
InterStim Therapy for Bowel Control is also approved in
Europe and is pending FDA approval in the U.S.
• Future acceptance of the RestoreSensor, which was launched
in Europe during the fourth quarter of fiscal year 2010. The
RestoreSensor is an innovative spinal cord stimulator that
includes our AdaptiveStim feature, which automatically